3
Worldwide Bus sales 2010 - 20162016: A record year for bus sales with 364,000 (+8.1%) units sold.
2017: Policy distortions are likely to negatively impact bus demand.
0
50
100
150
200
250
300
350
400
450
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
000's
-10%
-5%
0%
5%
10%
15%
20%
YoYVolume Growth Rate
4
Worldwide Bus sales 2010 - 2016
-24
-16
-8
0
8
16
24
32
China North
America
Europe India Rest of
Asia
South
America
000's
5
Worldwide Bus & Coach sales in 2015 - 2016
11.1%
-27.8%
-7.1%
7.8%
12.5%
-30.0% -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0%
Europe
North America
South America
Asia
World
6
0
4
8
12
16
20
India China South
America
Europe Rest of
Asia
North
America
000's
Worldwide Bus-sales in 2020
›Mr. Hernan Cavarra, Industry Analist, Frost & Sullivan
10
Keynote:
“ The Latin American Market for buses and coaches: facts and figures
›Despite Headwinds Transformative Trends Expected to Propel LATAM Bus Market to Over 48,000 Units
11
Brief Insights on the Latin American Bus Market
12
Agenda – Our 15’ minute journey
Top Transformational Shifts and Urban transportation
LATAM Bus Market – Now and 2022, what´s next?
Conclusions, examples and a peek into the future
"A Developed Country is not a place where poor have cars. It's where the rich use Public Transportation"
Enrique Peñalosa, Mayor of Bogota, Colombia
Top Transformational Shifts that will shape the Future of Mobility
14
Multi-modality
Transit Buses, Urban
Rail, and Taxis
Dedicated Road Lanes
Preference for Shared
Mobility Models
Leveraging Big Data
Fleet-readiness and
Meeting Peak Hour
Demand
Electric Mobility
Transit Buses will
Pioneer the Zero-
emission Drive
Mobility Integration
Smartphone-enabled
Seamless Commuting
Battery & Charging Tech
OEMs are Entering New
Markets and
Partnerships
Chinese OEMs
Expansion
Growing Market
Penetration
Megatrends Influencing
the Bus Market
Organization, Connectivity,
New Business Models,
New Fuels of the Future
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Impact of Top Mega Trends on the Bus Market
15
• Telematics will experience rapid proliferation, thereby
elevating passenger transport efficiencies and resulting in
reduced commuting time and operating costs.
• Applications, such as prognostics, will deliver meaningful
total cost of ownership (TCO)-related value, Wi-Fi
connection, smartphones apps, track-and-trace systems,
fuel cost reduction, and security enhancement-focused
applications to deliver value in emerging LATAM markets.
Urbanization
Connectivity—Mobile Resource Management
• Development of BRT systems expected to lead to foster
Heavy duty over 12m length city transit buses, leading to
further polarization of bus classes.
• There will be an increment in demand for natural-gas and
hybrid-electric buses by 2023.
• Urban population density growth will influence new bus
designs and usher the proliferation of HD transit city
buses.
Mega Trend Implications
Sou
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Fro
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Su
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n
Impact of Top Mega Trends on the Bus Market
16
North
America
Latin America
China/India
Existing BRT with expansion plans
HD Transit Bus Market: BRT System, Global, 2015–2022
New BRT systems in planning phase
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Key Influencing Trends
17
• Being a BRT hub, LATAM will drive
innovation and the mass adoption of IT
services in transit buses and other mass
transit modes.
• Investments will be made in ICT solutions
and upgrades to 4G/5G networks to reduce
carbon footprint and augment wireless
CCTV access.
Policy Drivers BRT Status
Green Tech Incentives
• LATAM will need at least 2-3 years to recover
from the economic crisis.
• Mexico, Chile, and Peru will be the major growth
drivers for buses until 2018.
• By 2020, 50,000 old buses are likely to be
replaced by new energy buses across LATAM’s
major cities.
• Road tax exemption is in place in only a few
countries for plug-in and electric buses. Colombia
has earmarked $40 million for 2013 to 2017.
• EV buses are being tested in Sao Paulo, and
Mexico City and Argentina have called for an open
tender to acquire 400 EV buses for its national
BRT corridors.
Intelligent Mobility Drive
Current 202267 108Number of cities
209 335Number of corridors
1,813 km 3,050 kmLength
Sou
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Impact of Top Mega Trends on the Bus Market
18
New Fuels of the Future• Natural gas to gain marginal penetration rate among various
powertrain fuels in heavy duty buses, mainly in Mexican andPeruvian bus markets and possibly Colombia as well althoughwith low crude oil prices, NG powertrain is not such aninteresting option and H&E gain future penetration.
• Hybrid and electric powertrain technologies to achievehighest CAGR growth until 2022, and at an accelerated pacethereafter thanks to BRT systems development.
• Diesel to continue as the most common fuel, representing86.1% to 91% of all powertrain fuels in new Bus and Coachesin 2022.
Mega Trend Implication
s
Unit Shipment Forecast by Powertrain and Country
19
Total Bus Market: Unit Shipment Forecast by Powertrain, LATAM, 2016 – 2022
Optimistic Scenario
2022
Diesel,
86.1%
2016
Diesel,
97.6%
90.0%
85.0%
75.0%
97.3% 78.0%91.5%
15.0%
7.0%.
6.0%..
1.7%.
7.0%..
.2.8%.8.0%.
4.0%..
0.5%.
4.5%
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
Arg Bra Mex Chi Peru Colombia
Un
its
(0
00
s)
Diesel NG Gasoline Hybrid Electric
~ 48,446
5.9% CAGR
2022 Regional Sales
5.5%0.5% 8.5%
1.0%
~34,310
All
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ysis
2.0%
0.5%
4.2%
4.8%
4.5%
4.5%
4.1%
0.5%
1.2%
1.0%
H&EV0.22%
Unit Shipment Forecast by Powertrain - LATAM
20
Diesel; 86,1%
NG; 4,1%
Gasoline, 0.5%
Hybrid, 4.5%
Electric; 4,8%
Diesel97.6%
NG; 1,2%
Gasoline;
1,0%
Hybrid; 0,2%
Electric
0.01%
CAGR 5.9%
Total Bus Market: Percent Unit Shipment Forecast by Powertrain, 2016-2022
98%
93%
86%
1,17%
2,50%
4,08%
0,97%0,75%
0,49%
0,21%
2,50%
4,04%
0,01%
3,00%
5,25%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
8,0%
9,0%
10,0%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 2019 2022
Po
we
rtra
in S
har
e
Po
we
rtra
in S
har
e
Year
Diesel NG Gasoline Hybrid Electric All
figu
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Unit Shipment Forecast by Powertrain and Country
21
Total Bus Market: Unit Shipment Forecast by Powertrain, LATAM, 2016 – 2022
Pessimistic Scenario
2022
Diesel,
91.2%
2016
Diesel,
97.6%
96.5%
93.0%
80.0%
98.0% 86.0%93.5%
15.0%
3.0%.
3.0%..
1.0%.
1.5%..
.0.5%.
4.0%.
2.0%..
0.5%.
2.0%
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
Arg Bra Mex Chi Peru Colombia
Un
its
(0
00
s)
Diesel NG Gasoline Hybrid Electric
~ 48,4465.9% CAGR
2022 Regional Sales
2.0%0.5% 8.5%
4.0%
~34,310
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2.0%
0.5%
1.5%
1.5%
4.6%
0.5%
1.2%
1.0%
H&EV0.22%
2.0%
1.8%
Electro-mobility and buses – the need?
22
Sou
rce:
IPC
C, F
rost
& S
ulli
van
an
alys
is
0
20
40
60
80
100
120
140
160C
ar
(Ga
solin
e)
Ca
r (D
iesel)
Ca
r (E
lectr
ic)
Sco
ote
r (T
wo
-S
tro
ke)
Sco
ote
r (F
ou
r-S
tro
ke)
Min
ibus (
Die
se
l)
Bu
s (
Die
se
l)
Bu
s (
NG
)
Bus (
Hybrid)
Bu
s (
Ele
ctr
ic)
Ra
il T
ran
sit
GH
G E
mis
sio
n (
gm
/pas
se
ng
er
km
)
80 gm
HD Transit Bus Market: GHG Emission in Transportation, Global, 2015
Public transit systems rank as being the most efficient in terms of GHG emission perpassenger-km. Transit buses adopting green powertrain technologies is a significant steptoward a sustainable public transit system.
Powertrain Outlook
23
Region
Powertrain
Diesel/Biodiesel NG Gasoline Hybrid Electric
High demand in 2022Market in 2015 Moderate demand in 2022 Low demand in 2022
Total Bus Market: Powertrain Standard Overview, LATAM, 2016–2022
H&E= Hybrid and Electric
Snapshot of LATAM Bus Market in 2022
24
~34.3 (000) in
2016
~48.5 (000)
in 2022
5.9%
Chile
~ 3,300
[ 5.0% ]
Peru
~ 3,676
[ 1.6% ]Brazil
~ 19,070
[ 9.2% ]
Mexico
~ 11,000
[ 2.3% ]
Argentina
~ 5,000
[ 7.0% ]
~55 Unit
in 2016 [ 0.1% ]
~5.4 (000)
in 2022 [ 9.3% ]
115%
Electric and Hybrids
powertrains Sub-
segmentTotal LATAM Bus
Market
CAGR
%
% d
eno
tes
the
20
22
fo
reca
st o
f re
gio
nal
sh
are
in t
he
LATA
M b
us
mar
ket.
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ysis
Total Bus Market: Unit Shipment Forecast, LATAM, 2022
Colombia
~ 6,400
[ 6.5% ]
Partial Matrix of OEMs and Powertrain
25
Cu
rre
nt
Diesel NG/Biodiesel
Powertrain
Hybrid
20
16
-20
22
Plug-in Fully Electric
Total Bus Market: OEM Powertrain Standard Overview, LATAM, 2015-2022
• Most of the major OEMs operating inLATAM sell hybrid and plug-in hybridbuses in their respective domesticmarkets.
• Product launches and mass adoptionwill happen post 2020 as limited fundingand incentives are likely in the shortterm due to the economic crunch.
2016-2019
2016-2017
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Impact of Top Mega Trends on the Bus Market
26
New Business Models
• Platform-based production is a key phenomenon associatedwith globalization. It provides cost optimization benefits duringproduct development and enables the fulfilment of dynamicend-user preferences.
• OEMs and suppliers to explore opportunities with dedicated“value” bus models to penetrate and expand in emergingmarkets.
• Greater European OEM focus on creating value bus brands forthe mid-segment market while Chinese OEMs will focus on lowcost offering and new fuels and powertrains options.
• Soft technologies (e.g., telematics, safety, data analytics) willemerge as major growth strategy model ingredients for OEMsand suppliers.
Mega Trend Implication
s
Sou
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SWOT Analysis
27
Strengths Weaknesses
Opportunities Threats
• Lack of developed urban
and inter city trains and
railways
• Expanding mega cities
needing well developed
transport systems
• Low-cost Chinese OEMs
focusing on LATAM market and
establishing production sites
• New taxation reforms to fuel
hybrid and EV bus introduction.
• Expanding BRT Systems
fueled by national
governments
• New emission regulations
being adopted to adapt to
developed markets
technologies
• Underdeveloped HD
market niches in Chile
and Peru
• Economic and political
crisis characterized by low
GDP and lack of
governmental investments
in public transport
• Lack of well-developed
INFRASTRUCTURE In
Chile, Peru, and Argentina
for EV units introduction
• Energetic crisis in
Argentina undermines EV
market development
• Development of subway
lines in main LATAM
cities
• Political and economic
crisis in Brazil will push
the market down until
2019
Chinese OEMs Expansion in LATAM Bus Market
28
Total Bus Market: Market Share by OEM,
LATAM, 2016
Total Bus Market: Market Share Forecast by
OEM, LATAM, 2022
MB42,2%
MAN/VW9,3%
Volvo5,2%
Scania6,9%
IVECO2,5%
Agrale4,2%
Dina4,0%
International
4,2%
Hyundai1,8%
HINO3,3% GM
4,5%
Yutong0,4%
Other Chinese
5,4%
Others5,9%
MB42,5%
MAN/VW10,5%
Volvo8,0%
Scania6,0%
IVECO2,5%
Agrale4,8%
Dina4,0%
International
3,5%
Hyundai2,0%
HINO3,5%
GM5,5%
Yutong3,0%
BYD1,0%
Other Chinese
1,5%Others1,7%
Frost & Sullivan predicts that Chinese OEMs will experience steep growth in the select LATAM busmarket mainly fueled by low cost portfolio offering and Electric powertrain advanced development
Sou
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OEM Performance in 2015
29
0 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000
Mercedes-Benz
MAN / VW
Scania
Volvo
Agrale
Yutong
Chinese
International
DINA
Hyundai
GM
Brazil Argentina Mexico Chile Peru Colombia
Daimler is expected to increase it portfolio offering
with value bus options to compete with the Chinese
low-cost offering strategy as well as less than 12
meters buses in Colombia.
While Volvo is expected to lead the electric bus drive, other
European OEMs are expected to catch-up quickly with slew of
product launches and alternative powertrain options such as
natural gas in Mexico and Peru.
The launch of electric and hybrid buses, the increasing
export footprint, and domestic production sites
investments in Brazil and Mexico are expected to bolster
Chinese OEMs’ brand strength, being BYD the current
flagship and Yutong the biggest.
Total Bus Market: Unit Shipment by Key OEMs, LATAM, 2016
All
figu
res
are
rou
nd
ed. T
he
bas
e ye
ar is
20
15
. So
urc
e: F
rost
& S
ulli
van
Bus Attribute Focus of OEMs
30
Electrification and Hybridization
Next Generation Powertrain
Technology
Safety Systems
Comfort and Convenience Features
Vehicle Connectivity
Vehicle Customization
Price Sensitivity
Strong
Trend Moderate
Trend
Trend in
2016
Trend in
2022
Low
Trend
1 2 3 4 5
HD Transit
Low High
MD Transit MD Inter City HD Inter City
Total Bus Market: Technology Outlook by Sub-segment, LATAM, 2016–2022
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1:1 Market Cooperatives 1man = 1 bus. Disorganized, nofixed routes, no fixed fares.
Case Studies: Colombia - BRT
31
Before Now
Cities are consolidating organized publictransport systems. Organized masivetransport systems BRT,«alimentadores», fixed routes and fares.
Challenges fot BRT
• Error in passengers estimates• No government subsidies• Illegal transport (moto-taxismo)• Private operators bankrupcy• Robust regulation regarding safety,
certifications, accessibility• Problems with supply chain (tires, OEMs
service and spare parts
• Strong government measures againts illegal transport
• Regulate a well price structures scrapping program for usedbuses
• Create Government subsidies like in Chile, Argentina or Europesince the system is not self-sustainable with the ticket prices
• Regulate routes so as to avoid cannibalization between BRT and traditional buses lines and create harmonization between BRT and «alimentadores» (feeder buses).
• Invest in INFRASTRUCTURE in those cities where its stilldefficient or there are lack of covered rooutes (Ex. Bucaramanga)
32
Case Studies: Colombia - BRT
Possible Solutions?
Case Studies: Colombia Market
33
• In Colombia there are 2 types of markets: o Traditional (mainly feeders market, Buses of 12 mts and less) that mantains
stable in 2,500 to 2,600 units per year (urban and inter-municipal) that has a natural renewal every year ans is more stable . Operator can buy up to 10 unitsand there are growth perspectives.
o BRT (Sistemas Integrados – Transmilenio, Transcaribe, MIO, etc): Articulated, Bi-articulated, HD buses mainly. They are undergoing a crisis, with privateoperators in bankrupcy or owing large amounts of money to banks, financialinstitutions and supply chain. They are in need of fleets renewal and instead of growth, renewal of units is more probable BUT Changes are needed. Cycles of renewal are of 5 years in average and is more volume sale for OEMs.
• Market is often impacted by GDP variations and regulations (such as safety) thatdetermine units sales. Small cities are good market niches for Traditional marketwhile BRT is only possible in big cities with big avenues and infrastructure due toturning radius, bus volumes, etc.
Case Studies: Colombia Market
34
• Regarding powertrains and fuels future market Diesel will remain dominant in Colombia although is a regional benchmark in Hybrids and EV buses.
• Colombia demands Euro IV fuels at a national level although Transmilenio demands Euro V and Medellín is moving towards that goal due to emission issues.
• NG was an option 2 years ago and even GM launched a unit with this powertrain but due to NG rising costs and crude oil low prices, its not so attractive. Also NG can only be utilized on fixed routes (due to lower autonomy) and demands big infrastructure investments for recharging. So…Its NG an actionable option?
• Hybrids and EV are also being studied for the BRT systems replacement but againinfrastructure for recharging stations and also higher units prices and service are bigchallenges.
• Long Distance Bus Market is an interesting market niche with good potential due topeace negotiationn with FARC that permits safer journeys Low Cost flights competition is only a challenge for less than 500 kms distances. Important: Entertainment systems and comfort.
LATAM
35
• Stable urban MD (less than 12mts) market (2,800 – 3,000 per year) with naturalrenewal cycle every 5 to 6 years to mantain low TCO.
• Long distance makret in crisis since they lost subsidies to diesel and disabledpassengers.
• 2013 and 2014 peak sales are almost impossible to obtain again. It was due toexcess of liquidity (FINAME) Soft credits, low taxes and long payment termsMore parc than demand.
• It need to solve first it political and economic crisis. Market will grow by2018-2019 thanks to fleet renewal needs mainly.
• Between 2019 and 2022 growth will be experienced in Mexican market pushedby units renewal and introduction of NG, Hybrids and Eletrical powertrains forBRT lines mainly in main Mexican cities (DF, Monterrey, Guadalajara, etc)
• Worst scenario Only 1 BRT line in Lima*, but there is a big challenge in termsof informality, lack of regulation in routes and tickets prices.
• Between 2018 and 2019 EURO IV emission standards are going to beimplemented in Peru and fleet renewal will push sales.
• Possible EV buses implementation.
Key Predictions
36
The Bus Market will experience will account for about 48,500 units by 2022 reaching a
5.9% CAGR growth for the 2016-2023 period. Although BRT systems development across
the region will be pushing the market, the MD segment will be of great importance and
account for most volume sales due to regional countries cities geographies and
topography.
While European OEMs will continue to dominate the market with Mercedes-Benz
dominating the overall bus market in each of the studied countries, Chinese OEMs
could increase their market penetration (mainly BYD and Yutong), pushed by the
development of H&E (BEV and PHEV) transit buses for the growing BRT systems in the
region and the establishment of overseas production units, either through subsidiaries or
acquisitions. Volvo & GM also could grow thanks to its electric and NG powertrain bus
development but AGAIN INFRASTRUCTURE is the key word.
Although Brazil and Mexico will be leading the market in terms of units sales,
Colombia, Argentina and Chile will experience the highest growth in the overall
market, growth by 2022. Peru will be LATAM’s second-largest MD market while Chile will
be LATAM’s third-largest inter-city market and Argentina the third largest in the transit
segment by 2022.
That is that for today, thank you for your attention
38
Hernán CavarraSr. Industry Analyst
Intelligent Mobility – Automotive & TransportationDirect: +54 11 4776 8069Email: [email protected]